DC Price Increases: ER, Quintess, BH

[Steamboat Bill]

Here is a great article from Helium Report

http://www.heliumreport.com/destina...usive-resorts-quintess-bellehavens-000907.php

The part I really liked was this:

Why raise prices? Because they need to, and because they can.

It's a trend among destination clubs to increase membership deposits with club expansion. The increases enhance financial stability and provide the resources to improve member services and grow the roster of homes. Remember that the destination club industry is still relatively young, and many clubs are just now seeing how the reality of the hospitality business may not have aligned with the spreadsheets of their initial business plan. That's to be expected. In the private jet world, pioneer NetJets launched over twenty years ago and has only recently established a viable roadmap for sustained profitability. By comparison, most destination clubs are making excellent progress in firming up their business model.

 

[pwrshift]

In all the announcements of membership increases they also show increases in annual fees ... which I assume all members have to pay regardless of their membership price? Some of the ER increases are high.

what will happen to the DC annual fees over the next 20 years? If they have 17 resorts to choose from now, what will those fees be when they have 54 like Marriott does? Judging by some of the increases I've seen for some DC's the Marriott MF increases of last year will look very minor.

Brian

 

[NeilGoBlue]

In all the announcements of membership increases they also show increases in annual fees ... which I assume all members have to pay regardless of their membership price? Some of the ER increases are high.

what will happen to the DC annual fees over the next 20 years? If they have 17 resorts to choose from now, what will those fees be when they have 54 like Marriott does? Judging by some of the increases I've seen for some DC's the Marriott MF increases of last year will look very minor.

Brian

All of the DCs that I talked to, locked in your MF when you join. There is usually a cap, like CPI +3%.

So, different members pay different amounts of fees, depending on when they joined. The DC figures out what they are going to charge (for example 1% plus cpi) and then that gets applied to whatever you are currently paying.

I for sure know that this is the case for Bellehavens.

 

[Steamboat Bill]

Judging by some of the increases I've seen for some DC's the Marriott MF increases of last year will look very minor.

As percentage of yearly increase, every DC's yearly MF increase are MUCH LOWER than Marriott's recent price hikes.